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Ramalingam Kalirajan |9224 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - May 27, 2024Hindi

Hi sir i am 50 years old and i am selling a property for 3 crores and its guidance value is only 70 lakhs this is the amount which i can get registered but i wanted to keep whole money of 3 crores as fixed deposit and need monthly interest so please let me know how can i do this

Ans: Evaluating Your Situation
You are selling a property for Rs 3 crores, but its guidance value is only Rs 70 lakhs. This means the registration will reflect the lower value.

You wish to keep the entire Rs 3 crores in a fixed deposit (FD) and earn monthly interest. This is a conservative and secure approach to managing your funds.

Understanding Capital Gains Tax Implications
Selling a property for a value higher than its guidance value has tax implications. The difference between the sale price and the guidance value is considered capital gains.

Capital gains tax can significantly impact your net proceeds. It’s essential to plan for this tax liability before making any investments.

Planning Your Fixed Deposit Investment
A fixed deposit is a low-risk investment option. It provides regular interest income, which can support your monthly expenses.

Fixed deposits in reputable banks are secure, but interest rates can vary. Compare rates across banks to find the best option.

Generating Monthly Interest Income
Interest from fixed deposits can be received monthly, quarterly, or annually. For regular monthly income, opt for a monthly interest payout.

Calculate the interest income based on the prevailing FD rates. Ensure it meets your monthly expense needs.

Advantages of Fixed Deposits
Fixed deposits offer capital protection and guaranteed returns. They are easy to manage and provide a stable income.

There is no market risk involved, making them suitable for conservative investors.

Disadvantages of Fixed Deposits
Fixed deposits generally offer lower returns compared to other investment options. Inflation can erode the real value of returns over time.

Early withdrawal penalties can also reduce your effective returns if you need to access the funds before maturity.

Diversifying Your Investment Portfolio
While fixed deposits are secure, consider diversifying your portfolio. This helps manage risk and potentially increases returns.

Actively managed mutual funds can offer better risk-adjusted returns. They are managed by professionals who can navigate market volatility.

Benefits of Actively Managed Funds
Actively managed funds can provide higher returns by making strategic investment decisions. They adjust the portfolio based on market conditions.

These funds can offer a good balance between risk and return, suitable for long-term growth.

Regularly Reviewing and Adjusting Investments
Monitor your investments regularly to ensure they align with your goals. Adjust the portfolio as needed based on performance and changing needs.

Regular reviews help keep your investments on track and make timely adjustments.

Consulting a Certified Financial Planner
A Certified Financial Planner (CFP) can provide expert advice and help you create a comprehensive financial plan. They can guide you on tax planning, investment diversification, and achieving your financial goals.

CFPs offer personalized advice, ensuring your investment strategy aligns with your risk tolerance and objectives.

Creating a Comprehensive Financial Plan
A detailed financial plan should cover all aspects of your financial life, including tax planning, investment strategy, and retirement planning.

Ensure the plan is flexible to adapt to changing circumstances and financial goals.

Conclusion
Your conservative approach to investing in fixed deposits is understandable. To optimize your strategy:

Plan for capital gains tax implications.
Compare FD rates to maximize interest income.
Consider diversifying your portfolio with actively managed funds.
Regularly review and adjust your investments.
Consult a CFP for personalized financial planning.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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